As both LTE deployment and upgrades to HSPA/HSPA+ technologies gather pace around the world, average advertised maximum download speeds for mobile broadband are growing. As of March 2012, based on almost 3,000 plans from 113 operators across 33 countries in Strategy Analytics' Mobile Broadband Price Benchmarking Service, average maximum speeds reached in excess of 14 Mbps, a rise of over 13% since December 2011, while over 730 plans - almost a quarter of the total - have maximum advertised download speeds of 21 Mbps and above. It is debatable how many users actually achieve these speeds, of course, and mobile broadband is unlikely to be a substitute for fixed broadband any time soon, in most markets at least. Given this steady rise, however, it is increasingly a viable complement to fixed services. This uplift in speed has been accompanied by an 8% increase in average allowances, which reached 8.3 GB by Q1 2012.

As we would expect, postpaid plans are typically cheaper than prepaid - for some usage levels, up to a third cheaper. Naturally, the balance here is the ongoing commitment required by postpaid plans.

A more detailed analysis of how mobile broadband charges are evolving is available for free download.

If anyone thinks that pricing always trends downwards as competition intensifies, they obviously aren't tracking mobile broadband.

A cursory glance at the news in any given week will often reveal yet another mobile operator who has either moved away from flat rate data pricing, or who has reduced upper data limits.

The pre-cursor to these changes is that operators are struggling with capacity issues, as demand for mobile data grows. If you've ever spoken to anyone who uses mobile data, chances are they will tell you how poorly their service performs when they are on the move, particularly if they are in higher density areas, where networks are much more likely to be overburdened.

The problem is that there is not much that operators can do, at least in the short term. True, we have new generation networks like LTE coming along - but they aren't here yet, and the reality is that demand for mobile data is growing at such a pace that these new networks will find themselves faced with similar capacity issues before long.

Operators are also looking at off-load solutions. O2 in the UK recently announced the launch of a free wireless network that promises to be double the size of existing networks by 2013. Whether the extent of the coverage will be enough is debatable (the number of hotspots cited doesn't seem that high given the geographic reach needed), but initiatives such as this are a move in the right direction in dealing with the growing capacity issues they are facing, caused by the rise in smartphone ownership, and the resulting increase in data traffic on the move. However, it is not a solution that will have an immediate impact on what is already a serious problem.

Mobile operators have found themselves turning to pricing initiatives as a partial solution to the issue of burgeoning data growth. Of the 74 mobile operators and over 600 data packages that Teligen tracks as part of its mobile broadband service, T-Wireless, very few offer genuinely unlimited data subscriptions. And of late, we are seeing a marked shift to capped usage, along with a reduction in upper limits, and a significant price tag attached to further usage over and above this limit for the remainder of the month.

While this may seem unpalatable, the reality is that, at present, for many, the allocated allowances are rarely reached, and they won't be significantly impacted by the price changes - that is if you ignore the fact that a reduction in usage allowance for the same price is, effectively, a price increase. However, the longer term is unlikely to present such a rosy picture for users, who are increasingly incorporating ever wider mobile usage into their daily lives, driven by smarter devices, increased ease of use, more readily available, attractive content, and a wider range of applications. Whether mobile operators become more innovative in their mobile broadband pricing, and offer users something in return for price hikes, remains to be seen. But one thing is sure, mobile broadband pricing only seems to be heading in one direction.

If you want clarity around mobile data pricing, it seems that the UK is not the place to be at the moment. Following the general path that many operators seem to be following as of late, T-Mobile confirmed that, as of 1 February 2011, it was going to limit all customers to a monthly data allowance of 500MB. For many, this meant a very sizeable reduction of 50%, down from 1 GB. For Android handset owners, who are currently allocated a rather more substantial 3 GB per month, the picture was even bleaker.

Before the news even had chance to filter through the industry proper, however, T-Mobile issued a second announcement that the change would apply to new and upgrading customers only, and that existing customers would see no change to their data cap. In addition, changes to data usage policy would not apply to corporate contracts.

Perhaps the hurried retraction was in response to customer backlash, some of whom will have selected T-Mobile precisely because of its high data allowance compared to certain competitors. Or perhaps the company was reminded by Ofcom that any communications provider must give its customers at least one month's notice of any change of this nature, and that customers could terminate contracts without any penalty if a change was not acceptable to them. Whatever the reason, it does seem that T-Mobile has not stepped quite so boldly down the road as some of the other players in the UK mobile market - for now at least.

While this demonstrates just how important clear and consistent messaging is around an area that is difficult to decipher at the best of times, the underlying trend illustrates how operators are trying to deal with the phenomenal growth in data across their networks - but that's a whole new can of worms.

Telenor Sweden has launched a new mobile broadband package aimed at 3G subscribers “Mobilt Bredband FastPrist Premium” who wish to upgrade to LTE (Long Term Evolution) when it becomes available. Initial download speeds offered are 10Mbps but this will automatically upgrade to 16Mbps as soon as Telenor deploys its new LTE network. Monthly rental for the new tariff is SEK 249 and includes a Huawei E1820 modem, which can handle both 3G and LTE speeds. Furthermore, customers must sign up for a 24 month contract and is available to both residential and business customers. No fixed date has been set for the launch of the new network. Telenor is developing its LTE network in Sweden with Tele2 and Net4Mobility. Jóhanna Helgadóttir – Senior Consultant – jhelgadottir@strategyanalytics.com